Date:30/05/2008 URL: http://www.thehindubusinessline.com/2008/05/30/stories/2008053051961700.htm

Back Eligibility norms for exchange traded currency futures

Our Bureau

Mumbai, May 29 The technical committee, set up jointly by the Reserve Bank of India and SEBI, today issued a report listing the eligibility criteria for the exchanges wishing to trade in currency futures, members and clearing and settlement operations.

According to the report, the membership of the currency futures segment would be separate from the membership of the equity derivative segment or the cash segment of a recognised stock exchange.

Liquid networth

The trading member will be subject to a balance sheet networth requirement of Rs 1 crore, while the clearing member would be subject to a balance sheet networth requirement of Rs 10 crore.

The definition of balance sheet networth would be the same as that in the equity derivatives market. The clearing member would also be subject to a liquid networth requirement of Rs 50 lakh. “The minimum liquid networth shall be treated as a capital cushion for days of unforeseen market volatility,” the report said.

The trading members and sales persons in the currency futures market must clear a certification programme, which is considered adequate by SEBI.